Cloud financials: Markets and vendors; Wipro

Abstract

Cloud computing is an emerging computing trend which promises to revolutionize the way organizations think about, plan and consume IT. An organization looking to avail cloud services can do so under three different models i.e. it could either avail IT infrastructure on the cloud also called Infrastructure-as-a- Service or it could avail application infrastructure i.e. Platform-as-a-Service. Finally an organization could avail Software-as-a service and shift the responsibility of managing the complete enterprise IT stack to vendors. It is the SaaS model that truly promises to revolutionize IT consumption by an organization leading to significant savings in resources. There are certain characteristics like high degree of standardization and relatively less interaction with other on premise applications that make a particular application suitable for SaaS model. Amongst the financial applications used across organizations it is found that core financials and financial governance applications are more suited for SaaS deployment and hence these are the applications that will see the greatest adoption of SaaS/cloud model. The vendor space in cloud financials is dominated by tier II ERP vendors like Netsuite, Ramco and Cloud-only vendors like financialforce.com, Intacctwith traditional Tier I vendors like SAP and Oracle only recently coming up with their standalone financial application offerings as SaaS.Apart from application functionality, looking at aspects like costs, whether the SaaS provider owns the infrastructure, what platform is used for developing the application and the focus of the vendor on cloud offerings can help make decision regarding selection of vendor for cloud offerings. Overall, after comparing the Total cost of ownership (TCO) of an on-premisefinancial application and a comparable SaaS application and study of the available solutions in the market it has been found that mid-size(number of employees between 250-1000) and small( number of employees < 250) organizations offer a more favorable case for cloud adoption. For large firms (number of employees >1000) although SaaS model offers significant cost savings, the current unavailability of solutions in the market acts as a deterrent for cloud adoption Cloud model offers tangible benefits to the user but there are tradeoffs involved in using cloud services. Some of the important issues with cloud usage are data protection, loss of governance, isolation failure and cloud outages. Organizations wanting to avail SaaS offerings can adopt two pronged security measures. They can use encryption solutions on premise or in the cloud to protect the integrity of data and also while entering into a contract with SaaS provider can ensure that they are protected in case any of the above listed issues arise by ensuring contractual obligation on part of the SaaS provider. The world market for cloud computing is expected to show strong growth going forward with emerging economies like Asia pacific and middle east likely to experience high percentage growth rate. The global public cloud computing market is expected to grow at around 20% in 2012-13 while in India the same figure stands at 36%. In India SaaS will dominate the total cloud market with around 1/3rd share in the total cloud market. Middle East and Africa is also expected to show a high growth rate of 25% in the public cloud market fuelled by high level of awareness about cloud model.